Get a job in South Dakota and you’ll get paid at least $7.25 per hour — unless you’re waiting tables or another tip-dependent job, in which case your employer has to pay a minimum of $2.13 before tips.

Those numbers could be about to go up, if South Dakota voters endorse a proposal to raise the minimum wage to $8.50 per hour and the tipped-worker wage to $4.25.

The minimum wage hike will come before South Dakota voters next year if its proponents, the South Dakota Democratic Party and two labor unions, manage to get almost 16,000 signatures by November of this year.

“South Dakota’s one of the lowest-wage states in the country,” said Mark Anderson, president of the South Dakota AFL-CIO. “We’ve made every attempt we could possibly do to make it friendly for businesses. Now I think it’s time we make it friendly for workers. And this is a good start.”

The proposed initiated measure would index the minimum wage to inflation, giving automatic cost-of-living increases to the minimum wage every year. It would fix the tip wage to 50 percent of state minimum wage.

Anderson said the automatic increases would prevent future political battles over raising the wage, but David Owen, president and CEO of the South Dakota Chamber of Commerce and Industry, isn’t so sure.

Owen, the president and CEO of the state chamber, predicted his group would oppose the minimum wage increase.

“The higher you drive this up, the more you’re going to complicate people entering the workforce,” Owen said.

Statistics compiled by the federal Bureau of Labor Statistics estimate that about 6,000 South Dakotans earn exactly minimum wage, out of 253,000 workers who are paid hourly. Another 6,000 earn less than minimum wage.

It’s unclear how many people earn more than the current minimum wage but less than the $8.50 proposal. In some fields, such as food preparation, more than one-third of employees earn below $8.50 per hour on a national basis, according to the Bureau of Labor Statistics.

Owen said the small number of people affected was reason for caution.

(Page 2 of 2)

“Very few people stay at minimum wage for very long. And most of the people who are at minimum wage are nonbreadwinners, although there are people who are,” Owen said. “But the vast majority are students, people early on in their working career. Given the labor shortages in South Dakota, I think the marketplace has done a good job of keeping wages in fast-food restaurants and similar places slightly above the minimum wage.”

Anderson disagreed, saying he didn’t think anyone, whether “they’re 16 years old or 60 years old ... ought to be paid $7.25 an hour.”

Gov. Dennis Daugaard, a Republican, also responded negatively to the proposal.

“This issue should be based on economics, not politics,” Daugaard said in a statement. “There needs to be an analysis of how many jobs would be lost.”

But Zach Crago, the interim executive director of the South Dakota Democratic Party, predicted a minimum wage increase would help the economy.

“It’s common knowledge that people with more money in their pockets will spend that at businesses across South Dakota,” Crago said. “That’s money that will ripple through our economy and create opportunities for all people.”

South Dakota’s minimum wage was last raised in 2009, to comply with an increase in the federal minimum wage. The tipped worker wage hasn’t been changed in more than a decade.

Of the states surrounding South Dakota, only Montana has a minimum wage above the federal level of $7.25 per hour. Its workers have to get at least $7.80 per hour, though certain small businesses have a lower minimum. The Minnesota Legislature this year came very close to raising its minimum wage, but ended up recessing without a deal.

The proposed initiated measure raising South Dakota’s minimum wage is now in the hands of Attorney General Marty Jackley, who has two months to write an official explanation of the proposal.

Advocates will then have until Nov. 4 to gather 15,855 valid signatures. If they succeed, the initiated measure will be placed on the November 2014 ballot.